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Cryptocurrencies rally as China restrictions ease

Home >  Daily Market Digest >  Cryptocurrencies rally as China restrictions ease

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Written by:
Myrsini Giannouli

30 November 2022
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Risk sentiment was renewed on Tuesday, as Covid cases in China finally started to drop. After days of protests against the crippling Covid lockdowns, Chinese authorities finally seem ready to relax some of the harsh Covid restrictions. China eased some of its strident Covid regulations on Monday, although the government still maintains its zero-Covid policy. 

Bitcoin price climbed to $16,500 on Tuesday as risk sentiment improved. If BTC declines, support can be found near $15,500, while resistance may be encountered at $17,110 and higher up to $18,150. 

Ethereum price rose to $1,220 on Tuesday. If Ethereum's price declines, it may encounter support at $1,072 and further down at the psychological level of $1,000, while if it increases, resistance may be encountered near $1,350.

Market expectations of future rate hikes were considerably trimmed after recent US inflation data showed that inflation is cooling at a faster rate than expected. Reduced rate hike expectations diminish global recession concerns, boosting risk sentiment. Market odds are currently between a 50-bps and a 25-bps interest rate increase in December. Rate hikes are expected to taper off in 2023 as the central bank moves into a stable interest rate.

Increased risk aversion sentiment has hit crypto markets hard after the recent collapse of FTX. The FTX token faced liquidity issues, triggering a generalized crypto market sell-off. FTX CEO Sam Bankman-Fried has resigned and the company declared bankruptcy. These developments have undermined confidence in the crypto industry, giving rise to concerns of a cascading crypto crisis. Though many cryptocurrency-related institutions are still at risk from the fallout, such as Crypto Bank Silvergate, which has seen its stock price plummeting this month.

BTC/USD 1h Chart

BTCUSD 1hr chart

 

ETH/USD 1h Chart

ETHUSD 1hr chart

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Written by:
Myrsini Giannouli

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